Larry Bar Opened an Frame Shop and Completed These Transactions

question 74

Multiple Choice

Larry Bar opened an frame shop and completed these transactions: 1.Larry started the shop by investing $40,000 cash and equipment valued at $18,000.
2) Purchased $70 of office supplies on credit.
3) Paid $1,200 cash for the receptionist's salary.
4) Sold a custom frame service and collected a $1,500 cash on the sale.
5) Completed framing services and billed the client $200.
What was the balance of the cash account after these transactions were posted?

• A)$300.
• B)$41,500.
• C)$40,300.
• D)$38,500.
• E)$38,700.

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Definitions:

Physical Capital

Physical capital encompasses the machinery, equipment, and infrastructure a business uses to produce goods or services, distinct from financial capital or human skills.

Average Total Cost

The total cost of production divided by the number of goods produced, accounting for both fixed and variable costs.

Output

The total amount of goods or services produced by a firm, industry, or economy within a specific period.

Fixed Cost

A cost that does not change with the level of output or production, such as rent or salaries.